Companies were faster in paying their bills in the second quarter than in the first three months of the year.
Prompt payments rose from 39.04 per cent in the first quarter to 48.47 per cent in the three months to June 30, said the Singapore Commercial Credit Bureau (SCCB) yesterday. The bureau defines payment of at least 90 per cent of total bills within the agreed payment terms as prompt.
Slow payments - when more than 50 per cent of total bills are settled after the agreed terms - fell 10.06 percentage points from the first quarter to 41.35 per cent.
The payment performance figures for the quarterly report were compiled by D&B Singapore, which monitors more than 1.6 million credit transactions of firms operating through the SCCB.
Companies were faster in meeting obligations in all five sectors the SCCB monitors - construction, manufacturing, retail, services and wholesale - compared with the previous quarter.
D&B Singapore chief executive Audrey Chia said in a statement that faster payments indicated firms had improved cash flow and more ability to meet their debt obligations. She noted, however, that the improvement in payment speed was less significant in the manufacturing and retail sectors.
Slow payments in these segments fell only marginally relative to the first quarter.
They also made up half of the credit transactions of these sectors in the second quarter.
Manufacturing and retail were also the only two sectors where slow payments had increased on a year-on-year basis.
Manufacturers of transport equipment experienced the highest proportion of payment delays on credit transactions, with slow payments comprising 53.25 per cent of total credit transactions.
Easing consumer spending could have caused retailers of food, beverage and general merchandise goods to delay their payments, the SCCB also noted.
Ms Chia said it was unclear if the overall improvement in payment speed would continue for the rest of the year, given "ongoing domestic supply side constraints" and "tepid growth" in the external economy. She added: "Moreover, the improvements in payment performance were due to cyclical upswings in certain sectors.
"It would be prudent for firms to take into account any seasonal fluctuations in managing risks and planning for their cash flows."